The composite rating scale ranges from 1 to 5 with 1 having the least regulatory concern and 5 having the greatest concern.
2. Component ratings:
The component rating descriptions are divided into three sections: an introductory paragraph; a list of the principal evaluation factors relating to that component and a brief description of each numerical rating for that component.
Once the five component ratings have been assigned, an overall rating is derived and that is again on a scale from 1 to 5 also including both more recent quantitative and qualitative information.
There's something similar to the CAMELS rating system and that is PEARLS (Protection, Effective Financial Structure, Asset Quality, Rates of Return and Costs, Liquidity, Signs of Growth. PEARLS was created in the late 1980s by WOCCU (World Council of Credit Unions, Inc.).
Difference between CAMELS and PEARLS
Unlike CAMELS, PEARLS uses strictly quantitative indicators, evaluates the financial structure of the balance sheet and measures growth rates.
2. Component ratings:
The component rating descriptions are divided into three sections: an introductory paragraph; a list of the principal evaluation factors relating to that component and a brief description of each numerical rating for that component.
Once the five component ratings have been assigned, an overall rating is derived and that is again on a scale from 1 to 5 also including both more recent quantitative and qualitative information.
There's something similar to the CAMELS rating system and that is PEARLS (Protection, Effective Financial Structure, Asset Quality, Rates of Return and Costs, Liquidity, Signs of Growth. PEARLS was created in the late 1980s by WOCCU (World Council of Credit Unions, Inc.).
Difference between CAMELS and PEARLS
Unlike CAMELS, PEARLS uses strictly quantitative indicators, evaluates the financial structure of the balance sheet and measures growth rates.